Changes to government procurement rules

Original publish date – Thu, 10 Nov 2011 11:37:23 +0000, Keith

As from 7th December 2011, rules for government procurement change in terms of new regulations for the PPPFA – Preferential Procurement Policy Framework Act.

In terms of the new regulations, government must now also follow B-BBEE principles in its procurement process. For the first time all govt agencies, SOEs, organs of state will be required to take into account your GOOD B-BBEE score based on a valid B-BBEE certificate in awarding tenders. For tenders worth between R30 000 and R1 million the new regulations state that govt will use the 80/20 rule where 80% of the evaluation of the tender is based on price and 20% of the tender will be on the basis of your B-BBEE level. e.g if you are a level 1 company then you get the full 20%. If a level 4 then you get 12 points and so on. It means that companies with a good B-BBEE level stand a better chance of winning the tender. Companies without a B-BBEE certificate will need to discount their prices to win. For tenders worth above R1 million the 90/10 rule applies, where 90% is based on price and 10% on B-BBEE level.

The full conversion of B-BBEE level to PPPFA points are as follows:

BBBEE, PPPFA Tender Points Calculator

PPPFA – Government tender points allocation
B-BBEE Level B-BBEE Score Achieved
Level 1 Contributor? 100 points2010
Level 2 Contributor? 85 points but < 100 points189
Level 3 Contributor? 75 points but < 85 points168
Level 4 Contributor? 65 points but < 75 points125
Level 5 Contributor? 55 points but < 65 points84
Level 6 Contributor? 45 points but < 55 points63
Level 7 Contributor? 40 points but < 45 points42
Level 8 Contributor? 30 points but < 40 points21
Non-Compliant Contributor< 30 points00


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